Module B - Professional EthicsMODULE BProfessional EthicsLEARNING OBJECTIVESReviewCheckpointsExercise, Problems, and Simulations1.Understand general ethics and a series of steps for making ethical decisions.1, 2, 3, 4542.Reason through an ethical decision problem using the imperative, utilitarian and generalization principles of moral philosophy.55, 56, 573.Identify the different entities that make ethics rules for CPAs and public accounting firms.5, 64.With reference to American Institute of Certified Public Accounting (AICPA), Public Company Accounting Oversight Board (PCAOB), Securities and Exchange Commission (SEC), and Independence Standards Board (ISB) rules, analyze factual situations and decide whether an accountant’s conduct does or does not impair independence.7, 8, 9, 10, 1145, 46, 47, 48, 53, 59,62, 63, 65, 66, 67, 685.With reference to AICPA rules on topics other than independence, analyze factual situations and decide whether an accountant's conduct does or does not conform to the AICPA Rules of Conduct.12, 13, 14, 1549, 50, 51, 52, 58, 646.Explain the types of penalties that can be imposed on accountants.16, 1760, 61MODB-1

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Module B - Professional EthicsA Note on Module B, relating to the "Generalization Argument": In the interest of fairness, it should be noted that the generalization argument does not work in all cases, particularly in two circumstances: (1) When the argument is invertible, that is (a) when both doing something and not doing something would be undesirable and (b) when both everyone and not everyone doing something would be undesirable. For example: "What if everyone was a full-time farmer?" The results would be undesirable in our society because all other social functions would disappear, but this cannot mean that no oneshould be a farmer because then we would all starve. (2) When the argument is reiterable, that is, when arbitrary times, places or measures can be inserted in such a way as to make a decision appear to be nonsense. For example, "What if every auditor were permitted to own 1/10 of a share of each client's common stock? Presumably, the consequences of such minor holdings would not be generally undesirable, and so ownership of 1/10 of a share could be permitted. Now change the amount to 2/10, 3/10, 10, 100, 99%, and the problem becomes one of "where to draw the line." SOLUTIONS FOR REVIEW CHECKPOINTSB.1A professional accountant must be prepared to be agent, spectator, advisor, instructor, monitor, judge, critic.B.2Conscience might notbe a sufficient guide for personal ethics decisions because the individual's indefinable mental processes may be based on caprice, immaturity, ignorance, stubbornness, or misunderstanding. Conscience may fail to show the consistency, clarity, practicability, impartiality, and adequacy preferred in ethical standards and behavior. Exactly the same can be said about professional ethics decisions because a non-hypocritical individual can no more split his behavior between personal life and professional life than he can voluntarily split his or her own personality.

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